A member of the liberal Young Germany movement, Dingelstedt wrote political satires against the German princes, notably Die Neuen Argonauten (1839; “The New Argonauts”) and a collection of satirical poems, Lieder eines Kosmopolitischen Nachtwächters (1841; “Songs of a Cosmopolitan Nightwatchman”). Publication of the former book led to his dismissal from his job as a teacher in 1841. Between 1841 and 1843 he was a correspondent in Paris and London and underwent a political conversion that marked the beginning of his career as a state official.

Dingelstedt was appointed manager of the court theatres at Munich and Weimar and, later, director of the opera and Hofburgtheater at Vienna, and he was ennobled by the king of Bavaria. He was responsible for splendid new productions of the German classics and of plays by William Shakespeare. He was the founder of the German Shakespeare Society, and he translated many of Shakespeare's plays. Dingelstedt also wrote novels—including Die Amazone (1869), an art novel of some merit—and an autobiographical sketch, Münchener Bilderbogen (1879; “Picture Sheet of Munich”).